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My current thoughts on what will happen leaving a long March and moving into what’s going to feel like an even longer April -
Administration? - highly unlikely
D4E? - makes no sense at the current market cap. Raises next to nothing even at a 3x or 4x level
Short term financing - I still think we’ll see a mixture of renegotiated loans (both the 2024 & 2026 due loans), non core asset sales and a new arrangement for pre contract guarantees.
Results - my worry is that we see the results issued with a delay to the financial restructuring announcement. For me this pushes the SP sub 20p even if the results are inline with expectations. On the upside we may see shorters taking profits and exiting on the dip.
If we see an announcement of results and a financial solution as per above, I’d see a doubling of the SP to 55p on day 1 with a dreading increase up to 70-80p over the next couple of months. Good mid year results would bump it over the £1 mark. Further new contracts would also give a boost. I think these predictions are realistic is you use say the Wood Grouo Sp performance and results as a sector comparison.
I might be wrong, and it wouldn’t be the first time!
I’m wondering if yesterday’s boost was due to investors moving away from Wood Group and into Petrofac following their results yesterday?
My reading of the results were that they were pretty good but that growth and restructuring will mean a long haul before Wood fully realise their potential.
Petrofac on the other hand looks horribly oversold with a bigger order book (albeit with a much larger short term risk).
Wood shares are down 12% from yesterday morning, mirroring the PFC boost.
Might just be coincidence.
Other than a year end shuffle I can’t see a reason for a short reduction or a PI move on no news.
A leak on the short term financing is unlikely.
Anyway, let’s see if we can stay around 28 today which will be a good result.
Holding, not selling!
True Pokerchips, but with contract staff you carry the cost within the lifetime of the project (albeit at a slight premium) whereas staff on the payroll are an ongoing cost month in month out, irrespective of workload.
Part of today’s announcement from Wood was highlighting dramatic headcount reduction over the coming years.
It could be that they are moving to a model closer to that of Petrofac moving forward?
Not sure why you think I used to work for Petrofac Cuban? I never have and have no working experience in the sector.
My misspelled username refers to the length of time if been invested in this share!
Wood having 4x the payroll of Petrofac and only 3 quarters of the contract pipeline only goes to strengthen my point about how undervalued the business is at the current sp levels.
As for a pension deficit. It’s never been mentioned or reported as a concern in any of the Petrofac reporting or in any analysis that I’ve read. Where are you getting your information if you’re saying there is a pension issue?
As we await the Petrofac results news and the update on financing, it’s interesting to read up on what the reaction to the Wood Groups results today.
A pretty good set overall but the share price saw an initial 5% dip this morning (now recovering).
The most interesting part for me is that their order book stands at just £6.3b despite being such a huge business with double the employees of Petrofac.
It suggests to me that PFC are significantly undervalued.
https://dailybusinessgroup.co.uk/2024/03/wood-launches-60m-annual-savings-programme/amp/
A couple of things stand out in the article.
Firstly the author is an anonymous pseudonym, never a good sign.
Secondly, almost half the Petrofac section focuses on the long dead SFO case.
When read in isolation it’s a bit unsettling, but in reality it’s not telling us anything we don’t already know.
Just in case any newer members are concerned by Snappers posts, it’s only fair that you should be aware that in his older posts he show that he is a disgruntled former employee who has held a grudge against the company for years.
For those that can be bothered, scroll back to his post from 25th of September 2020 where he actually details his former role within the business.
Any insight he had is now long out of date and he’s been predicting the imminent demise of Petrofac for half a decade now.
It’s great to have different point of views on this board but this guy has one agenda, to undermine Petrofac at every opportunity and to unsettle investors.
These 6 weeks are going to crawl by.
I think we’re all going to have speculated to death every possible scenario / outcome by the time an announcement is finally made.
My current take is that while I’d love to see a takeover offer, I’m not sure we’ll see it in the short term.
I still can’t see the value or logic of a placing. If one was announced we would see the SP drop perhaps to the 10p level. A 4x placing at that level would raise only c£200m. Not worth it.
I still think that the combination of revenue from completed contracts, payments from Tennet and ADNOC new contracts, the sale of non core assets, smaller contracts such as the £200m continuation agreement announced last week, combined with a renegotiation of the banking facility due to expire in October will be enough to get the company through this financial squeeze.
I’m interested to know who is selling in the background and driving this current decline. Shorts are reducing so it’s unlikely to be them. I can’t see LTH PI’s bailing at this late stage……so it must be an II disposing in the background. Let’s see if there’s a TR1 in the near future.
A large contract RNS would be great to see, otherwise good luck everyone as the long wait continues.
This would make sense if the market cap wasn’t already in the toilet.
Even extreme dilution (x3?)at this level wouldn’t raise enough to cover the debt.
A few more contracts like todays….£200m over 3 yr, no guarantee….and the cash flow moving into H2 2024 / 2025 becomes much more palatable.
I was pretty disappointed by the “no new news” RNS earlier in the week, but after today’s RNS I think I was just failing to see the big picture.
I suspect what we’re actually seeing is a smart move by the BoD to control the narrative in the build up towards the EoY results and the funding update in April.
It’ll be interesting to see if there are any further contract announcements in the coming weeks.
I also like that the company is prioritising new work that fits in with the current commercial reality in which the business is operating. A smart 3yr continuation project of £200m, potentially driving £70m cash flow in year with no guarantee issues is smart business.
Feeling much more confident going into the weekend (although it would have been nice to see the 12% uplift in the SP this morning hold).
Paul- you’ve asked me and other posters a variation of this question multiple times.
We’ve all answered you with our opinions multiple times.
You then disappear for a bit, and after a while (usually a dip in SP) you come back and ask the same questions again.
You’ll excuse me if I step off that particular Groundhog Day roundabout.
You have your opinion, I have mine. At some point we’ll see who is right……..
Onwards……you’re bang on with your comments about Investor Relations at PFC. Arrogant, unhelpful, and terrible communication.
Definitely change needed, and the AGM would be a good opportunity to voice the concerns of PI’s who make up the majority of the company shareholder base.
I respect the BoD saying that they are not going to maintain a running commentary, but this weeks flaccid & poorly positioned RNS shows once again the disregard for market sentiment and poor timing shown by the company IR team.
The BNN article is actually quite balanced and the substance only really reflects what we already know (albeit with some specifics around the financing proposal that, if accurate, haven’t previously been released, but again aren’t really anything we didn’t already imagine was happening).
I actually take comfort from the positioning that this situation isn’t unique to Petrofac within the sector. It means that a revised funding approach / solution will need to be found if the sector as a whole is to move forward in a changing landscape.
The only point that raised my eyebrows was the mention of job cuts. I’ve seen nothing on this anywhere. Indeed my impression is that the company has been recruiting and expanding for months now.
Does anyone have a source or reference for the job cuts mentioned?
Overall I feel a bit more twitchy than I did last week, and the RNS hasn’t really helped boost my confidence. However, objectively there’s no new news, no bad news and we’re exactly where we were at the turn of the year.
Zero point in contemplating selling if you’re a LTH imo so the game continues!
No short increase either……
Alright. So it wasn’t the game changing RNS that we’ve all been waiting for, but equally there’s no bad news in todays announcement and some clues that things are moving in the direction that shareholders have been hoping for.
More than anything it once again shows how bad PFC are at investor relations though lol. It reads like it was written by the work experience person and was issued in a rush after yesterday’s big drop. If they’d issued this a week ago when we were steady at 30p I think we’d have seen a marked jump upwards. By issuing it today it just looks weak and I suspect it will have little impact on the price.
At least we now know that a raise is very unlikely and that the results will be out in April rather than March along with a proper update.
Holding of course, and we trundle on for another month.
Unfortunately Apothecary the last of my funds went in at 30.4p and 28.8p literally two days before we saw the start of this latest decline. If I’d done more research about the share falling out of the index I would have held fire just in case. Live and learn!
I’m still expecting the positive RNS but would much rather have it come out with the SP in the 28-30p range rather than the current low 20’s as I’m expecting it to at least double on positive news.
Unless shorts increased today (which I guess we’ll know tomorrow), it does look like someone is offloading in the background. Maybe Schroeders getting rid of the rump of their remaining holding?
I think they are below the threshold for a TR1 now so we wouldn’t get a notification.
It’s annoying to see a dip like this but as always, I’m still holding!
It’ll be interesting to see the shorts data trot the end of last week today.
If the shorts are still decreasing slowly and not increasing their position (which seems to be the case), I wonder if that means another II is reducing their holding in the background.
It’s unlikely that many LTH’s will be reducing now after 3 months of waiting when an update is likely to be made soon.
It feels orchestrated whatever is happening……above our pay grade as private investors 😊
Uncomfortable to see it back at this level again but nothing has changed and I’ll continue to hold!!
Everything is relative Amers but I totally understand your concerns. From my perspective you’re in a fantastic position with that average.
Mine is still just under 60p after years of averaging down and I know there are plenty on here who are North of that.
I’m kicking myself that I hadn’t anticipated a drop from falling out of the index, there could have been some good day trading wins there…. Hindsight is a wonderful thing!
As Yorkshire says, nothing has changed in terms of news and it still all depends on the next RNS.
It’ll be interesting to see if this dip was short driven (I suspect not).